Blogs and musings

Much of the discussion in terms of the impact of new technology on manufacturing jobs concentrates on the impact of advanced robotics and improved machine learning. From this perspective, the core assumption is that manufacturing continues much as now but with a shift from human to robotic labour.

In the optimistic scenarios, this will lead to lower costs, higher output (so the increased demand will generate new jobs) and overall more social wealth. More pessimistic observers tend to argue that there is no evidence that demand will expand (not least due to the uneven income distribution we already have and depressed wages) and that this will lead to a reduction in human employment. Even the IMF is now deeply concerned at the threat to wages and overall social equality.

Overlooked in this focus on automation is a shift in how production itself is changing. 3-D printers are relatively new but are becoming much cheaper to run and increasingly sophisticated. Production relies on the existence of raw materials (usually but not exclusively some form of plastics) that can be cut to shape and printed – either as a complete product or then finished later in the manufacture process. The technology offers real advantages in terms of personalisation of the output (it has started to be used to produce artificial limbs etc), that it further reduces the needs to hold inventories (as new stock can literally be produced to order) and that production becomes much less dependent on large scale power sources or access to raw materials.

The implications are mostly positive but with some caveats. It allows an economy to decentralise (important for a country such as Scotland with a large land area and relatively low population density). It makes it possible to manufacture in remote areas – something that is important in terms of renewable energy production where the best sites for solar, wind or wave energy production are often quite remote.

At the moment, it remains a relatively technical process (in that there is a need to design and finish any item) but this maybe changing either as complete kits are available to download or standardised approaches are developed. If this does take off, the scope for SMEs (and individuals) to generate complex and substantial manufactured goods will exist.

However, this reduces the costs of production and thus the ability to generate conventional profits and wages. As with the changes in information production and sharing this then raises the issue of where in a production chain can any rent or other earnings be extracted. Control of copyright may become important as this can affect both the original equipment and any designs in use, as will be supply of raw materials. So this may see manufacture shift its costs (and thus earned income) from the production process to the creation of raw materials (including power) and possession of the licences required.

This in turn leads to a discussion about how work and production is organised. On the one hand, there is scope for much more shared control over the process of production, on the other hand as production costs (and thus income) fall then earning wages from the work becomes less practical. If we carry on seeing wages as a cost of production as opposed to a reward derived from that production, then the future seems to be one of increasingly precarious income for many combined with the accumulation of wealth not by those who provide the capital but by those who can find ways to erect methods to extract rent (by providing the routes for activity or via control of patents). This suggests that as opposed to allowing those who can create such gateways to accumulate the wealth there is a need to think of means to either break apart these bottlenecks or to ensure that the monies currently being accrued as rent are shared with wages.

Even the IMF are now concerned that unmanaged introduction of further automation will lead to unsustainable levels of poverty. If it proves (and this maybe unlikely) that machines and humans become perfectly replaceable, then wages will fall even if overall output rises (at the least there are more ‘workers’ and the expansion of output cannot compensate). If machines can replace many jobs then at some stage wages for those in skilled (hard to substitute) work will increase in the longer term but for many wages and employment will fall.

Roger Cook

Comments are closed.

Author

Most of the material here reflects ongoing research projects .. or just musing about the writing process